Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

China’s Inner Mongolia Autonomous Region will curb aluminium capacity additions under the 14th five-year plan. The Development and Reform Commission of Inner Mongolia has drafted safeguard measures to keep a check on production volumes. In the years 2021 to 2013, the region will focus on the transformation of energy-consuming enterprises in sectors including steelmaking, electrolytic aluminum production, ferroalloy, copper, lead, zinc and chemicals and promote transformation of coal-powered plants. 


From Jan 1, new capacity projects will no longer be approved. All projects approved in 2020 but yet to start construction will be either suspended or postponed to implement volume control in the steel and electrolytic aluminum industries. Except for projects that have already been completed or undergoing capacity replacement and plan to use fly ash to extract alumina and produce electrolytic aluminum, no other project will be approved. The region also mulls strict control of new coke capacity. 


Also, from Jan 1, preferential tariffs for high-energy-consuming industries in West Mengxi Power Grid will be cancelled.


Capacity addition in 2021

Inner Mongolia’s Huayun New Materials’ Phase III 420,000mt electrolytic aluminum capacity replacement plan will be constructed in 2021. It consists of 420,000mt light alloy material project which includes 135,000mt Hubei Yichang Changjiang Aluminum Company, Shanxi Huasheng Aluminum 30,000mt and Henan Sanmenxia Tianyuan.


Chinese electrolytic aluminum producers are expected to add 3mn mt production capacity in 2021, according to research group Antaike. Majority of the addition will be in the Yunnan province with capacity addition of 1.88mn mt in 2021. 


The country primary aluminium imports declined by 49.8pc in November to 56,000mt from the prior year. In Jan-Nov period, imports dropped to 933,000mt while China’s primary output rose by 87pc in November.

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